Trading the Plan

Step by step

There is a lot of advice out there about planning and trading. I'm going to try and make this simple by giving you a template and example that you can implement and follow without much work.

First off, the old saying: Plan the trade and then trade the plan.

This is not bad advice but you need to put this into a structure that is easy to implement, easy to use and easy to measure.

Whatever stage of trading you are at I suggest that you take just one of the strategies that you trade (or want to trade) and use that in this planning exercise - let's keep it simple, easy and fast to implement. If we do that then all of you with and without ADD (attention deficit disorder) will be able to do this, even without Ritalin. (Later on you can come back and add other strategies to the plan.)

There are 4 steps, 2 before you enter your first trade, 1 while trading, and 1 after trading on the weekends.

My example:
Name: MA XOver
Description: Buy when 20 SMA crosses above 50 SMA and sell if cross is other direction.

Step 2 - Setup measurement and record keeping tool

(I assume day trading here but this can be used for any type of trading)

Here is a spreadsheet that was used in another article that will do very well as a template in this exercise: Trade Records Template

Adjust the spreadsheet by deleting and adding columns to suit the data that you want to collect. You will want to use the reason column for the short name of the strategy that you are planning. My example: MAXO.You may want to add a column called Taken. Put a true or false in this column to indicate if you took the setup or not.